Learning from the world crisis

DATELINE MANILA
by: BINGO P. DEJARESCO

There is a monumental reason to rejoice in that the feared Great Depression II never came to pass. Despite doomsday soothsayers, saying it will. Thank the gods for our economy is no longer export-dependent (sugar, coconut, copper etc.) as in the American Parity times - so the recent global financial contagion did not really break our backs. We have, instead, a buoyant domestic economy that keeps the spokes of the economic wheels sturdy.

This is courtesy of the 10 million OFWs that send US$18 billion in remittances annually that fuels spending - and which is more than twice the Philippine budget deficit. When the ripples of a feared recession hit New York and cascaded worldwide - there were no hordes of Filipinos OFWs losing their jobs and coming home through the airports and seaports.

Instead, our “modernday” heroes simply saved more abroad - so they could send more “bread” to their loved ones in the country, who felt threatened that there might be a backlash from the global crisis.

Lucky our stars that our dealings with European Union (EU) is no big deal compared to our USA-Japan engagements for the former is in deep financial turmoil.

The continent housing the richest consumers have countries with mountains of debts. Spain, the 9th largest world economy, is in trouble with unemployment hitting a huge 20% (compared to our 2008- 2009 7% and 8%). In similar dire straits are Greece, Portugal, Ireland which can pull down the average growth of the EU southwards - certainly a 1% growth that is less than what the USA is experiencing now.

Luckier again our stars that (our main partner) the USA recovery today is considered firm because it is fueled both by consumerism and new investments in plant and equipment. Nothing hollow there.

Doubtless, Washington will remain our economic and political ally in this side of the globe (especially against the tide of terrorism). RP should deftly optimize the alchemy of these two variegated goals to exact the best relational terms with Washington.

The dualism of our foreign affairs policy should be such that we must consider China to be our natural geographic ally who has been eyeing the development of our billions of untapped natural and oil resources. China is known to provide soft loans to those countries she does commercial trade with - for the construction of roads, bridges and seaports. No more ZTEs, of course.

That should solve part of our infrastructure shortfalls.

China’s demand for minerals and commodities is almost insatiable - and maybe new constitutional changes in that area should be in the works to enhance Philippine economic interest, LGU concerns and employment of residents in the area.

There are new global developments where RP can certainly take some cue from. This involves Africa, Indonesia and Malaysia.

People had heretofore looked down at Africa as a god-forsaken Continent of the Great Unwashed. However, through a massive education program of their women, it has been able to provide a great “production base”. Its trade relations with China, of course, had helped.

By 2020 Africa will have produced 1.2 billion in productively employable persons and 1 of every 5 youth in the world will be Africans by then - providing an extraordinary market for goods indeed.

This is where RP must read the signages well. TESDA and its training for hairdressing, cellphone repair, car repair etc are good entrepreneurial kick-offs. But RP should also develop - other than the call centers and medical transcriptionists - a manufacturing base able to work in foreign factories to be set up here. Someone must be in charge of setting up a radar for this piece of industrial intelligence work.

As the economists postulate, “One cannot develop economically without teaching the other 50% of the population (women) to be productive.” Our women must bear less children to have more time for productive work outside the home. According to NEWSWEEK magazine, the last years saw the potential of new economic leaders - second layer - in the so-called BRIC (Brazil ,Russia, India and China). Notice that they are heavily populated places.

Now they are talking of ABICI (Africa, Brazil, India, China and Indonesia). It would be interesting to study if aside from having oil and a huge populace - what has Indonesia done differently this time to be categorized in that league? And then there is Malaysia. Smaller than the Philippines - Malaysia has parlayed its great infrastructure, steady politics and tourist sites to become the 9th most traveled to nation on earth with 20 million tourists - the only Asian country aside from China in the Top Ten. Compare that to RP’s 3 million tourists. Surely we have much better and more varied tourist spots than Malaysia. What can Tourism Secretary Bertie Lim add to this?

There is one more item that perhaps the P-Noy Government can take a page from in the wisdom put forward by United Nations Secretary General Ban Kimoon who warned the world’s biggest economies in making the poorest of the world bear the brunt of plans to slash public debt and budget deficit. In Philippine terms, that means “balancing budget deficits” as GMA once dreamed about must never be in the P-Noy’s economic agenda in the next 6 years.

Because that can also mean that a Third World people like us may be deprived of the basic social and economic services of good governance in the futile effort of Government to match revenues and expenditures.

It is enough that we only meet judicious ratios on deficit/GDP or debt/GDP - good ratings of which would always make foreign credit available to the country to finance our growth.

The surge of Indonesia and Malaysia - and to a certain extent Africa - gives the Philippines some hope - that it can be done. Now that the political blessing of a huge mandate has been obtained, it is time to address the brass tacks of development.